In what could be termed India’s first major hostile takeover, engineering and construction major Larsen and Toubro has bought 51.8% of shares in Mindtree, thereby gaining majority control over the Bengaluru-based IT company.
L&T’s open offer for Mindtree was launched on June 17 and is set to close on June 28. On Tuesday, Mindtree's share had reached 48% after Singapore-based Nalanda Capital offloaded its entire 10.6% stake in Mindtree. Amansa Capital too, which held 2.77% stake in Mindtree sold its stake to Mindtree through the open offer.
Under the open offer, 73.9% of public shareholders sold their shares to L&T at Rs 980 a share. According to a Mint report, National Stock Exchange data showed that 3,79,65,103 shares had been tendered as of 12.30pm on Wednesday. L&T had made an open offer to buy shares of Mindtree at Rs 980 a share.
Further, Mindtree’s board also agreed last week to appoint L&T CEO SN Subrahmanyan, CFO RS Raman, and senior VP of L&T’s defence business Jayant Damodar Patil to the company’s board.
L&T first began the process of acquiring Mindtree in March when it bought 20.32% stake in Mindtree from VG Siddhartha, founder of Café Coffee Day and two of his companies.
Over the next two months, it bought 8.58% stake from other shareholders, which further increased its ownership to 28.9%, after which the open offer started.
In March, Mindtree’s co-founders Rostow Ravanan, Subroto Bagchi and Krishnakumar Natarajan strongly opposed the hostile takeover, saying that it made no strategic sense. Together, they own 13.32% in the company.
Now that L&T has gained majority control of the company, CNBC-TV18 reports that Mindtree founders have decided to sell their stake and exit the company, which would be the end of their fight against the E&C major.
According to the report, some founders may sell their stake in the open offer, while some may stay on for some time and sell their stake over a period of time.
According to Mint, L&T can buy another 15% of shares as it plans to spend Rs 10,800 crore to own 66% in Mindtree.